Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher.
Investors are looking ahead to the U.S. November consumer price index report released on Tuesday, which most likely will show annualized inflation slowed further to 7.3% in November.
Also, the Federal Reserve is set to raise rates by 50 basis points on Wednesday, following four consecutive 75 basis point hikes.
The fundamentals and technicals for stock index futures remain supportive.
CURRENCY FUTURES
The U.S. dollar index is lower.
Interest rate differential expectations are long-term bearish for the greenback, and lower prices are likely.
The euro currency is higher. The European Central Bank is expected to deliver a dialed-down 50 basis point rate hike on Thursday, despite worries about a looming recession and signs inflationary pressures may be easing.
The Bank of England and the Swiss National Bank are also expected to increase borrowing costs at their policy meetings on December 15.
The U.K. economy expanded 0.5% in October from September of 2022, which is the biggest increase in almost a year and above forecasts of 0.4%.
Japan’s November wholesale prices increased 9.3% from a year earlier, a rate of increase that was almost unchanged from the previous month. It was the 21st consecutive month to show an annual increase in wholesale prices.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are higher.
The Treasury will auction three-year notes and 10-year notes today.
According to financial futures markets currently, there is a 72.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14 policy meeting and a 28.0% probability that the rate will be hiked by 75 basis points.
The fundamental and technical aspects are supportive for futures.
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